Mrs. Tina is an Indian citizen and holder of Indian passport. For the past 7 years, she has been living in Dubai, where there is no personal income-tax. During the previous year 2023-24, she migrated back to India on 1st

Determination of residential status of Mrs. Tina for the AY 2024-25 According to section 6(1), in order to be treated as a resident of India in the PY 2023-24, Mrs. Tina should satisfy either of the following two conditions: Her stay in India should be for a period of 182 days or more in the PY 2023-24; or Her stay in India should be for a period of 60 days or more in the PY 2023-24 and for a period of 365 days or more in the four immediately preceding previous years. Mrs. Tina's stay in India in the PY 2023-24 was 91 days only (i.e., 31 days (Jan) + 29 days (Feb) + 31 days (Mar)). Her stay in India in the four immediately preceding previous years was 56 days. Consequently, she does not satisfy either condition (1) or condition (2) for being treated as a resident. Further, according to section 6(1A) of the Income tax Act, 1961, an individual who is a citizen of India would be deemed to be a resident of India if his total income, other than income from foreign sources, exceed ₹ 15 lakh during the relevant previous year and he is not liable to tax in any other country by reason of his domicile or residence or any other criteria of similar nature. In the given problem, the friends of Mrs. Tina have presented her with cash gifts to the tune of ₹ 21,00,000, which is to be treated as Income from other sources. Hence, her Indian income exceeds ₹ 15 lakhs. Since Mrs. Tina is a citizen of India who is not liable to pay income-tax in Dubai and her total income, other than income from foreign sources, exceed ₹ 15 lakhs, she would be deemed resident in India under section 6(1A) of the Act for AY 2024-25. A deemed resident is, by default, a resident but not ordinarily resident. In case of a resident but not ordinarily resident, income accrues or arises, deemed to accrue or arise and received or deemed to be received in India, is taxable. In addition, Income which accrues or arises outside India would also be taxable if it is derived from a business controlled in or a profession set up in India. The Finance Act, 2020, w.e.f. Assessment Year 2021-22 has amended the above exception to provide that the period of 60 days as mentioned in (2) above shall be substituted with 120 days, if an Indian citizen or a person of Indian origin whose Total Income, other than Income from Foreign Sources, exceeds ₹ 15 lakh during the previous year. The Finance Act, 2020 has also introduced new Section 6(1A) which is applicable from Assessment Year 2021-22. It provides that an Indian citizen earning Total Income in excess of ₹ 15 lakh (other than income from foreign sources) shall be deemed to be Resident in India if he / she is not liable to pay tax in any country. Computation of total income of Mrs. Tina for AY 2024-25 Particulars Amount (₹) Salary earned in Dubai (Does not form part of total income, since it accrues or arises outside India) Nil Income from other sources (Cash gifts received from friends) 21,00,000 Total Income 21,00,000